Cinedigm Digital Cinema Corp. (NASDAQ: CIDM) today announced the closing of a $125 million senior non-recourse credit facility led by Societe Generale Corporate & Investment Banking and a $70 million non-recourse credit facility provided by Prospect Capital Corporation (NASDAQ: PSEC). These two new non-recourse credit facilities will be supported by the cash flows of the Phase 1 deployment and the Company’s digital cinema servicing business and will refinance the Company’s existing $92 million non-recourse senior 2010 Term Loan and $98 million recourse Note. The senior facility has received an upgraded rating of Baa3 from Moody's Investor Service.
The new five-year term senior loan, provided by a syndicate of institutional lenders led by Societe Generale, will be at a rate of LIBOR +275 basis points with a 1.0% LIBOR floor, substantially improving upon the previous rate of LIBOR +350 basis points with a 1.75% LIBOR floor.
The new financing, provided by Prospect Capital Corporation, will be at an all-in rate of 13.5%, including a cash rate of LIBOR +9.0% with a 2.0% LIBOR floor, and a Payment In Kind, or PIK, rate of 2.5%, improving upon the previous all-in rate of 15% on the Company’s existing Sageview Note. In addition, the new Prospect loan extends the maturity to March 2021 from August 2014.
These new facilities significantly improve upon the terms of the previous financing arrangements through a combination of reduced borrowing costs, making all debt non-recourse to Cinedigm’s software and content businesses, and a significant maturity extension.“We are pleased to announce this successful refinancing of our existing debt," said Chris McGurk, Chairman and CEO of Cinedigm. "This transaction reaffirms the value of the Company’s digital cinema asset base and positions Cinedigm to accelerate our growth plans.” “This refinancing is a significant step in our progress towards strengthening Cinedigm's balance sheet,” added Adam M. Mizel, Chief Operating Officer and CFO of Cinedigm. “By lowering our cost of capital, extending our mezzanine debt maturity to 2021 and shifting all of our debt to be secured only by our deployment businesses, we have improved our capital flexibility, unlocked equity value and simplified our story. We appreciate the strong capital markets execution and lending support from our long time partners at Societe Generale and look forward to the new partnership we have forged with Prospect Capital Corporation.”